Resolution ER2-16S

Support for the Energy East Pipeline Project

Date:

March 15, 2016

Expiry Date:

April 1, 2019

Active Status:

Active

Sponsors:

RMA

Year:

2016

Convention:

Spring

Category:

Energy

Status:

Accepted

Vote Results:

Carried

Preamble:

WHEREAS the construction of TransCanada’s Energy East pipeline, which is proposed to transport crude oil from Alberta and Saskatchewan to refineries in eastern Canada, is integral to the economic prosperity of Alberta and Canada in general; and

WHEREAS the pipeline will reduce Canada’s dependency on foreign oil by allowing higher amounts of Canadian crude oil to be refined and consumed in Canada; and

WHEREAS nearly all of Alberta’s municipalities either directly or indirectly benefit from a healthy oil and gas industry; and

WHEREAS rural municipalities in Alberta are home to existing pipeline infrastructure and as such, collectively understand that they are a safe and preferable means of transporting energy resources; and

WHEREAS TransCanada has filed a formal application for approval of the Energy East pipeline with the National Energy Board, who is empowered to approve or reject the proposal based on the evidence submitted; and

WHEREAS in late January 2016, several municipal leaders in the Montreal area publicly opposed the Energy East pipeline based on the argument that the environmental risks of the pipeline would outweigh any economic benefits; and

WHEREAS the Government of Quebec announced on March 1, 2016 that it would seek an injunction to require the Energy East pipeline to comply with provincial environmental regulations, despite the fact that pipelines crossing provincial boundaries are under the jurisdiction of the National Energy Board;

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties demonstrate their support for the Energy East pipeline and inform the National Energy Board of this support;

FURTHER BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties collaborate with the Government of Alberta and other municipal associations to emphasize the local, provincial, and national benefits that the Energy East pipeline would provide.

RMA Background:

The AAMDC supports the development and construction of all pipelines that transport products to markets outside of Alberta in order to continue to strengthen the provincial economy and promote Alberta’s economic value.

The Pipeline

The Energy East Pipeline, proposed by TransCanada, would run approximately 4600 kilometres from Hardisty, Alberta to refineries in eastern Canada and a marine terminal in New Brunswick. The pipeline will use 3000 kilometres of existing natural gas pipeline that will be retrofitted to accommodate crude oil, as well as 1600 kilometres of new pipeline in the project’s far western and eastern portions, located in Alberta, eastern Ontario, Quebec, and New Brunswick. Once completed, the pipeline would be capable of transporting 1.1 million barrels of crude oil per day. TransCanada’s proposal is currently being reviewed by the National Energy Board (NEB), who has jurisdiction over pipelines that cross provincial boundaries.

According to TransCanada, the pipeline’s construction and operation would create significant economic benefits for Canada, including the following:

During the nine-year development and construction stage, the pipeline would support over 14,000 jobs annually.

In its first twenty years of operation, the pipeline would support an additional 3300 jobs annually.

The pipeline will produce approximately $10 billion in tax revenue to provinces and territories during development, construction, and the first twenty years of operation.

The pipeline will strengthen eastern Canada’s oil and gas refining industry by providing a consistent and competitively-priced source of crude oil.

The pipeline will reduce Canada’s dependence on foreign oil, as 86% of the oil currently refined in eastern Canada comes from foreign sources.

The pipeline will provide greater access for Alberta crude oil to reach international markets, which will help to strengthen the province’s oil and gas industry.

Opposition in Quebec

While Energy East would provide significant economic benefits to Alberta and Canada, like any pipeline project, there is considerable opposition, mainly related to environmental concerns. In January 2016, more than eighty mayors representing municipalities in the Montreal area declared their opposition to Energy East. Montreal Mayor Denis Coderre was quoted as saying “we are against [Energy East] because it still represents significant environmental threats and too few economic benefits for greater Montreal.” Coderre argued that not only would a spill or leak in the greater Montreal area compromise the region’s drinking water, but would likely cost between one billion and ten billion dollars to clean.

In part due to the comments made by the Montreal mayors, the Government of Quebec filed an injunction against Energy East on March 1, 2016. The basis of the injunction is that the government of Quebec believes that TransCanada must prove that Energy East meets Quebec’s provincial environmental laws.

On March 8, 2016, hearings on Energy East began in Quebec, delivered through the government of Quebec’s “Bureau d’audiences publiques sur l’environment.” The hearings provide the public and stakeholders with an opportunity to provide input into the impacts that the proposed project will have in Quebec, which will be compiled into a final report to be reviewed by the Government of Quebec. Ultimately the final decision on approving or rejecting Energy East will be made by the NEB, but the input of provinces is considered when the NEB reviews projects.

Support from Municipal Associations in Saskatchewan and Alberta

In 2016, the Saskatchewan Association of Urban Municipalities (SUMA) endorsed the following resolution:

Whereas the Energy East pipeline is integral to the economic prosperity of Western Canada and Canada in general; and

Whereas the pipeline will reduce Canada’s dependency on foreign oil;

Therefore be it resolved that SUMA write a letter to the Federal Minister of Transport in support of the construction of the Energy East pipeline.

On March 8, 2016, the President of the Alberta Urban Municipalities Association (AUMA) wrote a letter to all of Canada’s municipal associations calling for support of Energy East through a new “Go East” campaign. While not explicitly stated, it is likely that this initiative is in part due to the municipal opposition expressed in Quebec.

In addition to the letter, the AUMA held a rally at their mayors’ caucus on March 9, 2016, which included the support of Alberta Premier Rachel Notley. During the rally, Premier Notley stated that “when people in other jurisdictions think that by blocking oil transfer from Alberta that they’re somehow making an environmental decision, they need to actually understand what’s happening. All they’re doing is, they’re bringing it in from a different place. And they’re doing it in a way that doesn’t help their national economy.”

In addition to support from other municipal associations, the Federation of Canadian Municipalities will establish a task force that will focus on identifying and developing a report on municipal priorities relating to federal energy infrastructure.

The AAMDC has no active resolutions directly related to this issue.

Government Response:

Energy: Market access is a priority for our government. One of the surest paths to long-term prosperity for Alberta and Canada is to develop energy as sustainably as possible and to ship it to international markets via the safest and most efficient method, through infrastructure projects like the Energy East Pipeline.

The benefits for all Canadians from the Energy East Pipeline are immediate and clear; it is the safest and most economical method to move our oil and gas to markets and it has the potential to create thousands of jobs, increase refining in Canada, and support thousands of businesses in several provinces that provide materials and services to the energy sector.

We also know that developing energy resources and protecting the environment must go hand-in-hand. Our Climate Leadership Plan shows the world that Alberta is committed to being one of the most environmentally responsible energy producers in the world. We will continue to work on expanding market access in a number of ways, including taking leadership on environmental issues and working with other governments across Canada.

Getting this right will help position our energy sector to recover and grow.

Development:

RMA and the Government of Alberta supported the Energy East Pipeline through various channels. For example, the RMA brought this issue to the attention of municipal counterparts in other provinces as well as the Federation of Canadian Municipalities. The Government of Alberta has also been an advocate of greater market access. In October 2017, TransCanada Corporation announced it would no longer be proceeding with its proposed Energy East Pipeline. Although the Energy East Pipeline is not proceeding forward, the RMA has fulfilled the intent of this resolution and will continue to advocate for greater market access for Alberta’s resources. This resolution is assigned the status of Accepted.